Guest Post: How The U.S. Dollar Will Be Replaced

After being immersed in the world of alternative economic analysis for several years, it sometimes becomes easy to forget that most people do not track forex markets, or debt to GDP ratio, or true unemployment, or hunch over IMF white-papers highlighting subsections which expose the trappings of the globalist ideology. Sometimes, you just assume the average person knows what the heck you are talking about. This is, of course, a mistake. However, it is a mistake that is borne from the inadequacy of our age and our culture, and is not necessarily a product of weak character, either of the analyst, or the casual reader.

The great frustration of being actively involved in the Liberty Movement is the fact that many people are rarely on the same page (or even the same book) during political and economic discussion. Where we see the nature of the false left/right paradigm, they see “free democracy”. Where we see a tidal wave of destructive debt, they see a “responsible government” printing and spending in order to protect our “best interests”. Where we see totalitarianism, they see “safety”. Where we see dollar devaluation, they see dollar strength and longevity. Ultimately, because the average unaware citizen is stricken by the disease of normalcy bias and living within the doldrums of a statistical fantasy world, they simply have no point of reference by which to grasp the truth when exposed to it. It’s like trying to explain the concept of ‘color’ to a man who has been blind since birth.

Americans in particular are prone to reactionary dismissal when exposed to facts that disrupt their misconceptions. Our culture has experienced a particularly prosperous age, not necessarily free from all trouble, but generally spared from widespread mass tragedy for a generous length of time. This tends to breed within societies an overt and unreasonable expectation of ease. It generates apathy, and laziness. A crushing blubberous slothful cynicism subservient to the establishment and the status quo. Even the most striking of truths struggle to penetrate this smoky forcefield of duplicitous funk.

In recent articles, I have outlined the very immediate dangers of several potential economic events that are likely to take place this year, including the exit of peripheral countries from the European Union, the conflict between austerity and socialist spending in France and Germany, the developing bilateral trade agreements between China and numerous other countries which cut out their reliance on the U.S. dollar, and the likelihood that the Federal Reserve will announce QE3 before the end of 2012. All of these elements are leading in one very particular direction: the end of the Greenback as the world reserve currency.

In response to these assertions I have received letters from some people (some of them indignant) questioning how it would be even remotely possible that the dollar could be replaced at all. The concept is so outside their narrow world view that many cannot fathom it.

To be sure, the question is a viable one. How could the dollar be unseated? That said, a few hours of light research would easily produce the answer, but this tends to be too much work for the fly-by-night financial skeptic. Sometimes, the job of the alternative analyst is to make the obvious even more obvious.

So, let’s begin…

The Dollar A Safe Haven?

This ongoing lunacy is based on multiple biases. For some, the dollar represents America, and a collapse of the currency would suggest a failure of the republic, and thus, a failure by them as individual Americans who live vicariously through the exploits of their government. By extension, it becomes “patriotic” to defend the dollar’s honor and deny any information that might suggest it is on a downward spiral.

Others see how the investment world clings to the dollar as a kind of panic room; a protected place where one’s saving will be insulated from crisis. However, just because a majority of day trading investors are gullible enough to overlook the Greenback’s pitfalls does not mean those dangerous weaknesses disappear.

There is only one factor that shields the dollar from implosion, and that is its position as the world reserve currency. Without this exalted status, the currency’s value vanishes. Backed by nothing but massive and unpayable debt, it sits frighteningly idle, like a time bomb, waiting for the moment of ignition.

The horrifying nature of the dollar is that it is only valuable so long as foreign investors believe that we will pay back the considerable debts that we (the American taxpayer at the behest of our criminally run Treasury) owe, and that we will not hyperinflate in the process. If they EVER begin to see their purchases of dollars and treasuries as a gamble instead of an investment, the façade falls away. Yet again this year Congress and the Executive Branch are “at odds” over the expansion of the debt ceiling, which has been raised to levels beyond the 100% of GDP mark:

Barack Obama has made claims that increases in the debt ceiling are “normal”, and that most presidents are prone to hiking the barrier every once in a while. Yet, back in 2006, when George W. Bush increased debt limits, Obama had this to say:"The fact that we are here today to debate raising America's debt limit is a sign of leadership failure. It is a sign that the U.S. Government can't pay its own bills…Instead of reducing the deficit, as some people claimed, the fiscal policies of this administration and its allies in Congress will add more than $600 million in debt for each of the next five years…Increasing America's debt weakens us domestically and internationally. Leadership means that 'the buck stops here.' Instead, Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren. America has a debt problem and a failure of leadership. Americans deserve better."

For once, Barack and I agree on something. Too bad the man changes his rhetoric whenever it’s to his advantage.

Today, Obama now asserts that raising the debt ceiling is not an opening for more government spending, but an allowance for the government to pay bills it has already accrued. This is disingenuous and hypocritical prattle. Obama is well aware as are many in Congress that as long as the Federal Government is able to raise the debt ceiling whenever it suits them, they can increase spending with wild abandon. It’s like handing someone a credit card with no maximum limit. For most men, the temptation would be irresistible. Therefore, one can predict with 100% certainty that U.S. spending will never truly be reduced, and that our national debt will mount in tandem until we self destruct.

How has this trend been able to continue for so long? Our private central bank has created the fiat machine by which all economic depravity is possible. Currently, the Federal Reserve is the number one holder of U.S. debt. The Federal Reserve creates its own capital. It prints its wealth from thin air. The dollar, thus, has become its own lynchpin. The secretive institution which has never been subject to a full audit is now monetizing endless debt mechanisms with paper promises. What value would any intelligent investor put on such a fraudulent economic system?

The epic dysfunction of the dollar is rooted in its reliance on perception rather than tangible wealth or strong fundamentals. It is, indeed, like any other fiat unit, with all the inevitable pitfalls built into its structure.

Ironically, the value of the Dollar Index is measured not by its intrinsic buying power, or its historical buying power, but its arbitrary buying power in comparison with other collapsing fiat currencies.

The argument I hear most often when pointing out the calamitous path of the dollar is that it is the go-to safe haven in response to the crisis in Europe. What the financially inept don’t seem to grasp is that the shifting of savings back and forth between the euro and the dollar is just as irrelevant to our currency’s survival as it is to Europe’s. BOTH currencies are in decline, and this is evident by the growing inflationary pressures on both sides of the Atlantic. Ask any consumer in Greece, Spain, France, or the UK how shelf prices have changed in the past four years, and they will say the exact same thing as any consumer in the U.S.; costs have gone way up. Therefore, it makes sense to compare the dollar’s value not to the euro, or to the Yen, but something more practical, like the dollar of the past….

In 1972, just as Nixon was removing the dollar from the last vestiges of the gold standard, a new car cost an average of $4500. A home cost around $40,000. A gallon of gas was .36 cents. A loaf of bread was .25 cents. A visit to the doctor’s office was $25. Wages were certainly lower, but they kept much better pace with the prices of the era. Today, the gap between wages and inflation is insurmountable. The average family is unable to keep up with the flashflood of rising prices.

According to the historic buying power of the dollar, the currency is a poor safe haven investment. With the advent of bailout efforts and debt monetization through quantitative easing, its devaluation has been expedited dramatically. The Fed has left the door open for what I believe will be a final destructive round of publicly announced QE, weakening the dollar to near death:http://www.reuters.com/article/2012/05/16/us-usa-fed-idUSBRE84F12320120516

The question then arises; why do foreign countries continue to buy in on the greenback?

The Dollar Dump Has Already Begun

One of my favorite arguments by those defending the dollar is the assertion that no foreign country would dare to dump the currency because they are all too dependent on U.S. trade. To answer the question above, the reality is that foreign countries ARE already calmly and quietly dumping the dollar as a global trade instrument.

To those people who consistently claim that the dollar will never be dropped, my response is, it already has been dropped! China, in tandem with other BRIC nations, has been covertly removing the greenback as the primary trade unit through bilateral deals since 2010. First with Russia, and now with the whole of the ASEAN trading bloc and numerous other markets, including Japan. China in particular has been preparing for this eventuality since 2005, when they introduced the first Yuan denominated bonds. The bonds were considered a strange novelty back then, especially because China had so much surplus savings that it seemed outlandish for them to take on treasury debt. Today, the move makes a whole lot more sense. China and the BRIC nations today openly call for a worldwide shift away from the dollar:

With the global proliferation of the Yuan, and the conversion of the Chinese economy away from dependence on exports (especially to the West) towards a more consumer based system, the Chinese have effectively decoupled from their reliance on U.S. markets. Would a collapse in the U.S. hurt China’s economy? Yes. Would they still survive? Oh yes. Far better than America would, at least…

In 2008, I warned of this development and was attacked on all sides by more mainstream economists and Keynesian proponents who stated that such a development was impossible. Today, it’s common knowledge that our primary creditors are “diversifying” away from the dollar, though MSM talking heads and those who parrot them still claim that this is not a threat to our economy.

To be clear, the true threat to the dollar’s supremacy is not only due to the constant printing by the private Federal Reserve (though that is a nightmare in the making), but the loss of faith in our currency as a whole. The Fed does not need to throw dollars from helicopters to annihilate our currency; all they have to do is create doubt in its viability.

The bottom line? A dollar collapse is not “theory” but undeniable fact in motion at this moment, driven by concrete actions on the part of the very nations that have until recently propped up our debt obligations. It is only a matter of time before the dollar diminishes and fades away. All signs point to a loss of reserve status in the near term. What Will Replace The Dollar?

My next favorite argument in defense of the Greenback is the assertion that there is “no currency in a position to take the dollar’s place if it falls”. First of all, this is based on a very naïve assumption that the dollar will not fall unless there is another currency to replace it. I’m not sure who made that rule up, but the dollar is perfectly able to be flushed without a replacement in the wings. Economic collapse does not follow logical guidelines or the personal pet peeves of random man-child economists.

Though, to be fair, and to educate those unaware, there IS a replacement already conveniently ready to roll forward. The IMF has for a couple of years now openly called for the retirement of the dollar as the world reserve currency, to be supplanted by the elitist organization’s very own “Special Drawing Rights” (SDR’s):

The SDR is a paper mechanism created in the early 1970’s to replace gold as the primary means of international trade between foreign governments. Today, it has morphed into a basket of currencies which is recognized by almost every country in the world and is in a prime position to take the dollar’s place in the event that it loses reserve status. This is not theory. This is cold hard reality. For those who claim that the SDR is not considered a “real currency”, they should probably warn the U.S. Post Office, which now uses conversion tables that denominate costs in SDR’s:http://pe.usps.com/text/imm/immc3_007.htm

So, now that we know a replacement for the dollar is ready to go, the next obvious question would be:

Why would global elites destroy a useful monetary tool like the dollar? Why kill the goose that "lays the golden eggs"?

People who ask this question are simply unable to see outside the fiscal box they have been placed in. For global bankers, a paper currency is not important. It is expendable. Like a layer of snake skin; as the snake grows, it sheds the old and dawns the new.

At bottom, men who promote the philosophies of globalization greatly desire the exaltation of a global currency. The dollar, though a creation of a central bank, is still a semi-sovereign monetary unit. It is an element that is getting in the way of the application of the global currency dynamic. I find it rather convenient (at least for those who subscribe too globalism) that the dollar is now in the midst of a perfect storm of decline just as the IMF is ready to introduce its latest fiat concoction in the form of the SDR. I find the blind faith in the dollar’s lifespan to be rife with delusion. It is not a matter of opinion or desire, but a matter of fact that currencies in such tenuous positions fall, and are in the end replaced. I believe that the evidence shows that this is not random chance, but a deliberate process, leading towards the globalist ideal; total centralization of the world under an unaccountable governing body which operates a global monetary system utterly devoid of transparency and responsibility.

The dollar was a median step towards a newer and more corrupt ideal. Its time is nearly over. This is open, it is admitted, and it is being activated as you read this. The speed at which this disaster occurs is really dependent on the speed at which our government along with our central bank decides to expedite doubt. Doubt in a currency is a furious omen, costing not just investors, but an entire society. America is at the very edge of such a moment. The naysayers can scratch and bark all they like, but the financial life of a country serves no person’s emphatic hope. It burns like a fire. Left unwatched and unchecked, it grows uncontrollable and wild, until finally, there is nothing left to fuel its hunger, and it finally chokes in a haze of confusion and dread…

Speaking in Thursday’s edition of Die Zeit newspaper, Philip stressed that a monarch would be financially independent – and so would not be likely to accept presents from friends, such as those which led to Christian Wulff’s resignation from the presidency.

"A king is invulnerable to such cases," Prince Philip said. "Either he would have old family property or an Apanage – and it would be beneath his dignity to accept presents from friends."

"And there are no reporters on the level of sniffing around European ruling families,” added the prince, who is a Protestant minister.

Prince Philip said that although successful presidents made their mark with their statements, mentioning Roman Herzog and Richard von Weizsäcker as good examples, he said that words were not enough.

“This level of words is necessary, but they do not move people inside,” he said. “When our hearts are touched, we change. During the past football World Championship there emerged so much uncomplicated national consciousness that nose-wrinkling intellectuals no longer understood their country.

“Emotions are the field on which a royal family can play," he said. "They do not have to think up some programme, it goes to the hearts that they are simply there.”

He suggested that German politicians would even vote for a royal family to be reinstated, if it came to a vote – nearly a century after the last Kaiser was removed from the throne in 1918. Even left-wingers would be in favour, he suggested, pointing to Sweden where he said some socialists were also royalists.

In view of the demonstrations planned in the city of Frankfurt in the course of the next few days, the Executive Board of the European Central Bank (ECB) has taken the necessary steps to ensure that the ECB remains operational, with the objective of fulfilling its mission.

The ECB has also implemented measures to ensure the safety of its staff and visitors, taking into account the protection granted to the ECB’s premises and operations by the Headquarters Agreement between the ECB and the Federal Republic of Germany.

Your first point may indeed be the case, but your second is based on the assumption that you know what he is talking about with regards to the euro "replacing" the dollar and I think your assumption is incorrect.

See my further comments below if you are interested in testing that assumption.

BUT THEN AGAIN WHY IS AN SDR ANY FUCKING BETTER THAN A EURO OR DOLLAR. IT WON'T WASH. THERE IS NOTHING TO GUARANTEE THAT IT WILL NOT HAVE THE SAME CAREER AS THE DOLLAR, EURO, OR ANY FUCKING FIAT.

I hate this shit. But I sure as shit better get used to it. Justice does not matter, it is a fool's errand to seek it. They will do what they do. Unless we burn it to the ground, we must do what we must which is to try to out manuver and live with it.

The Euro and the SDR are better than the FRN$ because they are more easily controlled by TPTB behind the federal reserve and ecb. This allows them to screw the population even harder and extract more wealth, resources, etc from sovereigns. It is easier to do this with an SDR than a currency that is controlled by one nation-state. In short, the Rothschilds, Rockefellers and vampire squids have used up the dollar since 1972 and now they are ready to restart the process of another wealth and resource grab with another tool. Don't be so attached to the dollar, it's fate was sealed by Nixon 50 years ago.

perhaps the Euro was used by those who pull the strings to wean the "independent" nation states of EuroLand off their old individual currencies, retrain the minds to a different model of "money" - and now they can be herded towards yet another financial chess piece, incrementally widening the circle of banker influence.

the USDollar of course has been top o' the heap for decades now, and those same bankers have mis-used it accordingly - the taint of $ as an idea is spreading globally, and even the mighty murders of military can't hold this beachball under water forever - all fiat is faith-based, and the dis-illusionment of $'s is evident to any one watching.

given the IMF having the SDR in waiting since Nixon-era (end of gold standard, AND the un-locking of China's door to the world, *cough* Kissinger), I wouldn't be surprised if SDR's were used, via plastic 'n' pixels of course, why use outmoded "printing" of fiat, so messy. . .

Because it is only a medium of exchange, and is not attempting to be a concurrent store of value.

It is a shame the author of the post, and so many other "free-thinkers" have made up their minds that our monetary problems stem from fiat currency. They don't.

They stem from attempting to use the same media as both a store of value and a medium of exchange. That's the whole problem, right there. That's the root of the multitude of our problems.

So many minds wasting their efforts with false premises, all while accusing others of the same. Just because the authors of this site are professional technicians (and cynics) doesn't mean they haven't made assumptions too... this is a monetary error at the most fundamental level, but all technical analysis is derived from fundamentals, isn't it?

It matters not what we use for a MoE, as long as it is valued by something else as a SoV.

Issuance/creation of the MoE is then fully mitigated by its value. A MoE is only as valuable as the goods and services it can be exchanged for. Period.

Any currency can function fine as long as its users do not attempt to simultaneously use it as a store of value.

The much maligned euro differs in that it actually is valued, on the Eurosystem balance sheet, in gold. Got that?

Its creators publicly declare the value of their MoE, valued in their SoV -->GOLD<-- for all to see. The significance of this is not apparent to most people, but it would be if they took the time to set aside their prejudices at least temporarily and consider this objectively. The significance of this will not be apparent to most people until they cease attempting to store value in their medium of exchange. Remember, no one can dictate how you choose to save. If you choose to save in euros, it would be wise to pay attention to the fact that the issuer of the euro actually tells you, if you care to look, exactly how much value a euro currently has. So why would you store value in euro when the euro issuers have been transparent enough to tell you that they store their value in gold. If it is good enough for them...

The USD has far too great a debt load to survive at anything close to its current value, and this debt is all held as a store of value. LOL.

The dollar is old, aged by being used as both a MoE and a SoV at the same time, a mistake which enables the misappropriation of value from dollar holders all over the world to the US' benefit. You guys don't actually believe you enjoy your high standard of living because you are "better" do you?

FOA:

Politically, the world does not hate America; rather they hate the free lifestyle our dollar's illusion value brought us yesterday and today.

Haters gonna hate, but for small handful who haven't elevated their assumptions to beliefs here's a link.

the Euro is much prettier than an SDR and it has created a market for physical gold at market price....which will go much higher when the paper markets go boom (or crackle in zee fires of hyperinflation)

even if not one country uses the Euro as its internal currency the Euro has proven to the world that it takes its commitment to stabeeleetee VERY SERIOUSLY!!!

In fact that fact is leading to all kinds of problems for countries that can't control their spending now.

I say...Euro survives even if the countries that started it do not do so well...and the Euro, with its nice relationship to gold...wins.

In the United States, laissez faire economics and protestant religious zealotry have been stewed together by talk radio hosts and evangelists and labeled "conservative."

Europe still has a nascent conservative tradition, long-slumbering since the days of De Gaulle, but still there. I have little hope for a resurrection of true conservativism, but a little hope is hope still.

Got no arguments, no facts, no reasoning skills? Well, hell MF, just call them "kooks". Must be an Alinski, Ayers, Obammy thinker. Excuse please, non-thinker. Get back to MSNBC and HuffPo and eat your pablum.

Kooks, huh? You have quite a voacabulary. What are some of your other favorite words? Nigger, Macaca, Wetback, Faggot, Kike? If you are not already donning a white sheet and illuminating crosses in the front yards of people with Ron Paul signs, you might as well be. Oh, and when the movement does become a revolution as it inevetably will, you might just want to lock yourself in your house, watch "V for Vendetta" over and over, and keep pretending you understand what your avatar represents.

This. The world had a global reserve currency which articles like this tend to forget, gold or rather bills of credit that matured into gold bullion. The current world trade system evolved on these bills of credit as did modern economic formulas to calculate future value. At the root, the standard unit of account is assumed constant. Paper currencies are never constant as they can be inflated at will by banks, consumers and governments.

This is the problem, the formulas used evolved on a constant standard unit of account, historically gold or bills of credit that matured into gold bullion. Paper currencies cannot resolve this dillema even with the threat of global force, i.e. the point of a global gun to everyone's head.

While I appreciate the search for a universal currency... you can't have "universal currency" without a universal government... the EU is showing us that. And a universal government is not stable... anymore than a spinning top.

"There is only one factor that shields the dollar from implosion, and that is its position as the world reserve currency."

I'm not so convinced of this. The main factor that sheilds the dollar from implosion is that we have the majority of the guns and weapons to back up the dollar and that we are in debt more than any other country. If debt was simply the issue why hasn't the Yen been thrown into the dustbin yet?

These fiat currencies will fail but who knows when. And, because the US is in debt to everyone else it will fail last. The secret is "being in debt"....it's the reason why an idiot like Trump is still around. You need to have the banks unable to foreclose on you because you owe them too much....then the debtor has the debtee by the balls--not the other way around.

Japan being a "creditor" nation is all an illusion. Japan is a creditor nation because they engaged in the Yen carry trade for years. This was built on debt. They no longer produce anything and their social costs are exploding. As for your comment about the Japanese savings rate, it is irrelevant as the Japanese central bank will have to print it's way out of massive Yen appreciation and government debt both present and future.

And yes, in the bizarro world we live in debt is power. You have a job opportunity? I'm open to all 6 figure opportunities! With the momo's who are in charge now, certainly I deserve something!

Clint, you're putting a political slant on my comments that doesn't exist. I'm just telling you what's up. China doesn't hold the power you think it does. They have millions of millions of people and they don't exist in a vacuum. And what would happen if China dumped all their US paper. I will tell you...nothing. The Fed would buy it up or the US would tell the Chinese to go pound sand and they cannot sell it because they are "terrorists".

Some day in the not so distant future, Americans are snapped out of their Budweiser and Mac & Cheese coma as they passively watch "Dancing with the Stars" to a break in programming from the Oval Office.

President ________: "My fellow Americans...it is my duty as Commander in Chief to report that as of tonight, we are at war with the Peoples Republic of China. Their aggression against our allies in the South China Sea over the past few months has grown increasingly hostile, and the last straw was their unprovoked attack on the USS Eisenhower in international waters. We did not ask for this fight, but I can assure you, we will use every tool at our disposal to attain victory. Towards that end, I have ordered the Treasury Department as of tonight to repudiate the outstanding U.S. debt instruments that China currently holds. This action will instantly remove over one trillion dollars of funding for the Chinese war machine. Additionally, due to the advanced air defense and fighters capabilities of the Chinese military, I have authorized the immediate acquisition of 200 F-22s and 4 stealth naval cruisers...."

Everyone is held captive by the Bernank! The US could blow up the Chinese economy easily.

I'm leaning more towards the globalist banker mode - in that, there is no "US" or "China" beyond manipulating the economies towards a global meme - individual nationstates are being created and killed off at quite a pace lately, and their currencies are following - if one agrees that the bankers are global, and we know the Rothschilds have set up shop in China decades ago, then perhaps it IS just a giant game of RISK, with the target being fiat, the prize being resources - irrespective of the named "states" those things reside in.

I have often grappled with this exact argument. And, I agree with you to a certain extent. However, I believe the nation-state exists in a way as the parasite needs a host. The banksters can't live without the nation-state. The host or nation-state establishes the monetary unit, the false patriotism and means to wage the "currency" and trade wars.

The end game is just like Germany during Weimar. The bankers will load everybody up with debt and then buy up thire assets for "pennies". The question is whether there will be any pushback from the oppessed masses.

Eventually the US government soulution to the debt will be the usual Zimbawee trick we will be forced to exchange 1000 blue dollars for one red dollar and blue dollars will no longer be accepted as monies, Presto we are out of debt our new red dollars are now in efect. Still in debt ? now it will be 100000 red dollars for one Purple dollar in exchange. Dont laugh it has been done many times in history and it works every time.

All currencies, including the Chinese Peoples Money RMB, are worse than toilet papers. Death of USD? Hell no, as long as US Miltary still controls the distribution flow of oil and GMO seeds, USD is on a rock solid base.

I agree with his conclusion that the world will be feared into accepting the SDR under emergency when worldwide trade is on the verge of collapse. They need a global tax regime for it to work, and, mostly for that reason rather than the strict monetary one, this true lender of last resort will likely fail out of the gate. If it doesn't fail out of the gate, it will fail eventually anyway.

You had me until the part about the shift from the dollar to the SDR. How does that transition take place without the old dollar holders getting crushed? And if they get crushed, what's the incentive to make the transition?

It's pretty easy for the banking system to replace all of your $ in deposit with SDR, then give you the choice of whether to use it or abandon it. My guess is most people start using it and accepting it.

Whether they can enforce $ denominated debts is an altogther more tricky matter.

The Federal Reserve Note will likely still be in use for retail purchases. If a business wants to do international trade they will need to convert whatever currency they have into SDRs. Prices in FRNs will skyrocket. Savers in FRNs will get crushed. There is no incentive to make the transition, the FRN will just stopped being used for trade, ex Iran is now selling oil to China for RMB as I understand. Get your Au/Ag now.

Let me share my thoughts here folks. You know what changed everything for me and most I know? The internet. Period. You can find out almost anything you want, when you want, or need it.

The viel has been lifted friends, and its not going back on. We all and especially here on ZH have found out to much, we know the fucking score so to speak, so for for any of you NSA, GCHQ, Interpol whoever, go and collectively fuck right off.

the "internet" is just like a library - lots of information held in individual "books" (blogs, etc.) - if all one continues to "read" is porn, games, celebrity gossip, sports replays, etc. - then *shrug* how is this useful?

as to those who read ZH, etc. - even here there is no party line (thankfully!) beyond a relatively smart readership (trolled by the same dullards that populate both culture and the interwebs) that can argue their viewpoints. . .

So I'm getting it about like this: the dollar has ALREADY lost "global reserve currency" status, and there's no replacement yet, but it'll be the yuan or the IMF's SDR.

I'd say that's a reassuring prediction for the current monetary powers. The IMF works for the USA, and China has to deal with their own national problems before they'll be projecting comparable international financial power. It sure looks like they're for sale, though, same as all the other economic powerhouses of yesteryear.

Though I've read Zerohedge from the days of deadhead, Gordon Gekko and Andy Dufresne, I just got an account so I could see all this up/down arrow stuff and what gets rated how. (Plus I need a break from doing quadruple bypasses on a generation that replaced the two martini lunch with the three Cinnabun pre-lunch snack. If you want to know what Americans have become, Google "perniculi", for it says it better than anything else. That alone will keep you in the gym and off the Cheetos.) That a comment so thoroughly wrong and uninformed about Iceland gets all up arrows is worth the price of admission, even if it is free.

Rather than explain here---I know enough to know counter-arguments on site are counter-productive if not outright pointless---perhaps you might consider reading a variety of sources that attempt to explain what the genesis of the Icelandic debacle was. The Icelandic citizens come across not as banksta-slayers, but rather as people who said "if there ain't no free lunch I ain't playing anymore". Then they handed the bill for their own speculative frenzy---for which they were more-than-willing participants along with their bankers---to the proverbial widows and orphans of the UK and Western Europe.

"The bankers made me speculate" doesn't hold water. There is little praiseworthy about how the Icelanders made their own Hell, and it was largely an uncaring willingness to stiff far more innocent depositors that got them out of it.

the IMF'ers presently possess some 2800 tons of Au at several locationsand and just recently added another $2.3 billion worth to its holdings. obviously any attempt at the establishment of an SDR reserve currency would have a significant Au component. the acquisition of some 450 million rounds of .40 caliber hollow point ammuntion along with similar vast accumulations of Pb by the Department of Homeland Security seem to warrant some obvious concern regarding the future status of the USD reserve currency.

It was interesting to see all the usa haters here two years ago saying that the death of the dollar was imminent and the euro and yuan were so much better, and the usa was about to collapse at any moment due to misguided monetary and fiscal policy

the most important truth here, is it's the same people behind the scenes, the same peoples historically - they work generationally, behind the scenes, pulling all the monetary strings, rewarding the "heads of states" who play along, rinse, repeat, ad infinitum.

The BRIC Nations (and the Middle East and Southeast Asia) have found themselves trading their labor and natural resources for pieces of paper created from thin air. They would be exceedingly stupid to trade one fiat (USD) which is out of their control for another fiat (SDR) which is out of their control.

This guy is full of shit, SDR's won't work. What they will do is to resort again to a phony gold standard and try and resurrect the dollar that way. It will work for awhile, but then that will turn to shit while world trade continues to tank. By the time anyone gets to thinking about SDR's in a sea of floating currencies the world will be at war. This guy doesn't know what he's pontificating about.

HOWEVER.... if you'd like a view to the real world and a way out of this mess and rescue the dollar and reassert liberty and resurrected the economy go to www.nar2012.com, sign the petition, read how it is to be used to empower all American registered voters to elect a new Congress, and reclaim the powers of Congress, back to Congress. This forces the end of the FED, bankruptcy of the 2B2Fails, and that is just the start.

Dude, you are WAY out there and are a perfect example of the shit storm we are in here in the US. SDR's might not be the tool used but they could be. The world gets out from under the rule of the dollar and will NEVER go back gold or not.

This things you are calling for may happen one day but it will be at gun point and not by some web page sign up or by casting a vote.

You are never going to have the America you want, ever again, UNLESS you are willing to get it the way George and the boys did it back in 1776. We tried to throw off the central, imperialist bastards in 1861 and got beat. They will NEVER give that up without a F I G H T!!!! And until you are ready to do that,.......you're just a bunch of hot air and bullshit.

"the America you want" is a fiction, learned in skool, or from reading fictional accounts skewed towards stoking the inner patriotism of "we're #1!!!" flag waving that helps divide and rule, and makes for great global sporting events, and oh, wars too.

face it - if you weren't there, weren't alive in those past glory days, then you're reading a redacted version of history, one that suits the narrative of those who pwn minds currently. . .

You won't get that option in the world of "SDR's" because they will be all electronic. Look at what is going on in Europe right now. Now one can take out but a little cash each day, cash transactions are being made illegal, you can't take cash out of the country. Complete control will be electronic money so they can track and control your every move. Cash will be dead. I know, I know here comes the "cash will always be there on the black market, blah, blah, blah,". Yeah, but it will be so insignificant and small as to be useless. It won't be worth risk. Open your eyes and minds people, it is coming.

It amazes me that after all this time there is still so much confusion and delusion on this topic by ZH followers.

The writer makes THE point when he points to the desire for a one world order. Money means nothing to the people in control. It is only a means to an end. Unlike you and I they have all they ever want or need and care not about having money in their pockets so they can go to the mall this weekend, buy a new car, go on vacation, add on to the house, get a membership at a golf club, etc.

They use money to control the masses. That is why we got a fiat system to begin with. Then no one is independent and everyone is on the payroll of the central bank. Your individual wealth is controlled by the whim of a banker or board of bankers. If they can take that model and move it to a world level they will do so at earliest convenience. It is too obvious now that this is the plan in the works and is moving quickly into place.

I am not sure gold and silver will save you from the coming financial deluge. I have mine because it is the only reasonable course I can see at this point. Make no mistake, the whole goal is to get the smallest group of people possible (preferably one) to have control over the largest group possible (preferably all), and history has proven, money is the best tool for accomplishing that end. The dollar will be replaced because the world is now too big for the dollar. The governing currency/body will be international in its makeup. Europe and the euro was a test of this philosophy to see if they could dismantle nationality through economic means. This won't happen until there is a war and the objectors are crushed. There is a huge portion of the population that is for this and a huge part that is oblivious to this plan. The rest of us better decide now what we are willing to do to stand against it.

The one thing they really should have planned for was making sure fuckers like me didn't cotton on to what they were up to. Now I and many many others know the score, if I do nothing else but resist the PTB I will have done my part.

Not everyone is going to just sit back and take the shit coming our way. Some of us will fight back, and I intend to do just that.

If I'm going down, at least one or two of the fuckers are coming with me.

You shouldn't have let the internet get so fucking clever PTB, look what you've gone and done now, independent thinking bitchez

What is PTB? I am right there with you. They open the ball this time and my goal will be to get to the bastards that started this whole mess with their greed and power mongering. I don't want to hurt the poor, dumb, sheep in the field, I wan the ivory tower bastard that thinks he is untouchable and will just pick up the pieces after we are done killing ourselves for his benefit.

while I agree with your overall points in your prior post, this "Imma gonna gets THEM!!!" is an unrealistic knee-jerk - do you even know who "them" is, even with all the internets at your fingertips? where do they live? how, on earth, can you "get" to them to do whatever you think you will do??

no, best spend time and energy educating those you can get to - your community - so as to have some kind of buffer in place when shit gets real - all the "I'll take a couple out with me when I go" Hollywood nonsense is just folding your cards because you think they have the Ace. . .

The dollar will be replaced because the world is now too big for the dollar.

I disagree, the statement you made is right ONLY in the sense the PTB have made it worthless(outsourcing all major mfg, and self reliance, due to our capability to be SELF sufficient,that was the value of a dollar)..................before that it was BIG enough,because it had real value, a working , WORLD classs working ,wealthy society.

The SDR is just a big bag of crap that is dying. How is adding a bunch of garbage into the same pile going to add value. It is already 50% dollars anyway. Everyone wants to pretend that there is any choice beyond gold. There isn't. If the SDR is gold backed, that will be the only way it replaces anything.

And that would be: China, Russia, India, most of South America, all of the Middle East and Southeast Asia? Or do you think they will just play along with giving up control of their countries to the American/European Banking Cartel, ie. the IMF?

I'm a little put off by any opinion piece that spends the first 1000 words explaining how the writer is superior in intellect and knowledge than the reader....

Maybe he has a point, but it comes off like a college sophomore explaining what he learned in class to his dumb mom and dad. Mom and Dad knowingly wince and humbly settle in to listen, like I guess we are supposed to.

Hey honey, stop stacking those gold coins and come here quick. You've got to see this cute little hummingbird. Never seen one like this before. Too big to be a ruby-throat. Funny, doesn't seem interested in the drip feeder.

That was in 2011 and I saw dragonfly bug size flying bots being developed at Georgia Tech Research Institute as far back as 1998. Before our economy implodes; if the "Authorities" want to know what you are doing and what you possess, they will have the means -- count on it.

My wife and I were sitting out on the patio one early summer afternoon, drinking some margaritas. When right in front of us, a dragonfly snatched a house fly out of mid-air, landed on the rim of my glass and proceeded to eat the fly -- head first. After completing it's meal, washing off and flying away, we looked at each other and simultaneously said:

i wish this one had a meal to photograph, that sounds
like a sight to see. this one was just sun bathing i think?
it sat in that position for about 10 minutes then flew up
into a few acrobatic paths and landed in the same place
and stayed again for some 10 plus minutes. unusual, hasn't
happened since.

timing, something about a 100 year charter?
that ends in 2013 and a gnawing sense of lacking
something.... like ..
legitimate (adj.) mid-15c., "lawfully begotten," from M.Fr. legitimer and directly from M.L. legitimatus, pp. of legitimare "make lawful, declare to be lawful," from L. legitimus "lawful," originally "fixed by law, in line with the law," from lex (gen. legis) "law" (see legal). Transferred sense of "genuine, real" is attested from 1550s. Related: Legitimately.
.
there was law and then legitimate "money" but the system
of money was unsustainable, debt, it failed so they
no longer apply the law rather than face the simple truth
of the fraud. you might think that the fed would be
interested in renewing its charter, do what is necessary to
persuade the population that it is the honest broker it was
chartered to be. they have proven over and over that that is
none of their concern.
end the fed.

The title sounds like a must read to know what is going to happen to the dollar. The article reads like a witch hunt without knowing the witch. So, there is a witch about and you better be scared.

With the dollar within a hand bag headed straight for hell, and the US coinage going to steel content, no doubt there are problems. However, ZH is not a night around the campfire telling scary stories.

Brandon, you should stop calling it the dollar. The currency, including electronic, is the Federal Reserve Note. The unit of measure for FRNs is the dollar. This is completely different entity from that used to be called dollars.

The problem is that the challenge facing the civilized world today is that "The system of the World" is what is broken. It doesn't matter what currency we use as the reference currency, we are going nowhere really fast. We will soon face a choice WWIII or Anarchy and reconstruction.

The U.S. dollar has allies, intentional and uninentional. Intentional allies share values and/or eat at the table of U.S. policy, they do not want to hurt the U.S. because they hurt themselves. Unintentional allies have economic self-interest. In order to force a break with the USD, a power or alliance of powers must turn countries away from the U.S. and create a new global order that also benefits these countries. Or the U.S. has to jettison its allies.

The SDR is just a bastard dollar standard because like now, other countries will inflate against the basket faster than the US in order to continue the current system. SDR is a bandaid, not a replacement.

And finally, that inflation is why the death of the dollar is still a decade or more away: a dollar crisis could force a move to SDRs, but the way things are going, an emerging market/euro/yuan crisis seems more likely, with possible hyperinflation in the cards for China. It's truly sad, but the Federal Reserve is not the worst central bank, not by a long-shot, and foreign governments love money printing and central control as much, or more so, than the U.S.

What I expect will happen is foreign currencies will fail, placing more leadership pressure on the dollar (the dollar dump is a headfake for now), and that increased pressure, plus unwillingness to lead, will bring down the dollar. The U.S. will abandon military intervention first, turn towards protectionism along with the world, hyperinflations abroad will push the U.S. dollar too high and allow USG to go full Japan, and then, maybe in the 2020s, you'll see the USD die.

I wrote a plan to produce and allocate a fungible crop without money or wages using barter concepts including time banks, complimentary currencies, grain warehouse receipts, and the ideas of Silvio Gesell. The system is designed around Oregon's OMMP laws which outlaw most of the prevailing market and monetary system for the production of cannabis. The OMMP is unique in that it mandates a gift economy and essentially describes cashless barter and crop share. It provides a rare real world case case study of what happens when crucial variables of the marketplace have been forcibly removed.

Plan O primarily deals with the non horticultural issues of deploying land, labor, capital and initiative without normal prices, wages, or profit and how to build incentives into a system where consideration is illegal. Plan O shows how to unleash and utilize skilled labor without wages to create economic activity without money. It models a supply, distribution, and incentive system for marijuana production that can work without money or wages based on literal interpretation of Oregon's OMMP laws which prohibit wages and profit. This organizational structure can more easily be applied to other commodities and crops that do not have legal problems.

1. Shared crop necessitates cooperation toward common goals for shared common interest bountiful harvests which is a better community structure than self interested competition that breeds hoarding and dishonesty.

2. Commodity account balances have a maximum value related to legal weight limits. This is uniquely egalitarian because no one person can have more cannabis than the law allows. This fosters increased production and rapid turnover since getting your share more times is one of the only legal ways to get more.

3. Time bank volunteer networks are a liberating way for people to capture value from fallow skills that are needlessly waiting for a dollar that isn't coming. Time banks create economic activity in the absence of money and thereby enable survival without money. Time bank hours can provide an alternate medium of exchange. Negotiated time value is more egalitarian. CEO's would not be able to negotiate 250 times worker pay for themselves.

4. Commodity shares based on warehouse receipts can function as a store of value and medium of exchange. A medium of exchange that is directly backed by a locally produced commodity is not inflationary because there are no extra shares are created beyond the quantity of cannabis that has been produced.

5. Depreciative money combined with maximum balances reduces hoarding and accumulation of advantage. This further focuses the community on increasing the total crop since there are only two ways for OMMP patients to get more: by increasing crop frequency or increasing yield and crop size.

6. No free riders = no rentiers. Everyone is a stakeholder and individual exchanges can only be increased through active involvement.

Doing these things only requires will and cheap or free tools like open source software combined with ubiquitous communication devices. People need a way to meet their needs outside of the failed credit money system and can do it by organized sharing. There is no reason for skilled people to sit around waiting for a dollar to validate their abilities. They can trade their labor among themselves and capture real value. Real community democracy and freedom through cooperation are possible by capturing the inherent value in small world networks for the mutual benefit of members. This value is in underutilized skills, shared connections, and shared resources. When those three things are connected there is a synergistic community wealth building effect that occurs as exchanges proliferate. Increasing exchanges grows the community. We as a species can do better things with technology than spy on eachother or merely "Like" things on facebook (the only choice.) The same chains of our enslavement can also link us together in self sufficiency. All that is required is for people to look at things a little differently.

brandon - based upon the low rating of your article i feel that you speaking into large empty can.....nonetheless you are absolutely correct in your summation of events - events orchestrated by the traitorous rockefeller axis of evil and the bush crime syndicate.....

"....Americans who live vicariously through the exploits of their government. ...." - this is the empty can i was talking about....

I'll be quick. Let's start with mankind's perception as being limited to three dimensions, and his/her's use of time as a convenient fourth dimension [a parametric barometer of cause and effect ?] which in my opinion is vaguely impractical in a finite [lifespan] world such as ours. Ironically, mankind's reliance is on his six [?] senses - sight, touch, smell, hearing, taste, and the ultimate driver of our cognitive consciousness,... kinesthesis.

This is where your thesis is flawed regarding "Special Drawing Rights"? Our species adapts only when it becomes disparately panicked, by an exogenous event, period! Only then do we delve into our survival instincts parlayed with reliance`on`perception, the 'fear factor of self preservation'- being postulated on geographical equivalents determined by chance, and probability. Thus, I'm referring to individual singularity, and the certainty of predisposed esoteric assumptions espousing for the strangulation of the whole to satisfy the minutia laissez faire collaborative - detrimental only upon their monetary nihilistic foreign recourse, totally benign to our intuitive rationale as a holistic society that is at best fractionally tethered to a temporal-acquiescent?

The US dollar will always be for the 'TYME - being", America's equivalent to the seemingly tasteless amicable nuance of a nadir NWO Hegemony, always eclipsing it's zenith driven by our uniquely and God given,...sixth sense! God Bless America!

He is right on about the confidence issue and the fact that people are actively pursuing an alternative to the dollar. That is going on at all levels, from local right on up to soverign. Is it the largest factor in the equation today? How about tomorrow?

lol SDRs. that shit is so bogus. they do not work the way you are describing them and you don't need a some new synthetic global currency, which they are not. what we need are currencies with complete convertibility.

I agree with your assessment totally and have been echoing the same sentiment with mostly the same specifics as examples and arguments. The SDR is where most pushback comes, the argument is that the next reserve (read Global) currency will have to be backed by Gold or some baskets of commodities. This backing, since the IMF is not a sovereign, can only come from pledges by the participants and therein lies the problem. I suppose it is one of scale more than anythign, especially if it needs to satisfy the global currency needs.

There is a good likelihod that the BRIC nations will/have/are developing their own alternative which could be backed by their combined commodity wealth in terms of oil, natgas, precious metals, etc. Since we can assume the new currency will not be fiat and the BRIC nations are unlikely to pledge their assets to the IMF pot, how does the IMF have a chance of providing a global currency recognized by most/all nations in lieue of their own local currencies?

It seems a difference has to be drawn between a global currency and a reserve currency. From my point of view a global currency is one that is used globally (duh) in lieue of a local or alternative currency, whereas a reserve currency is one that makes it simpler to bind together the slew of currencies that exist - basically to simplify trade between nations. So, with a global currency there is no need for a reserve but that only works if the currency is truly global - at least used exclusively by all developed nations and most emerging markets - certainly the BRIC nations. I don't see it happening, maybe we get down to a few currencies like the Amero and Yuan and SDRs acting as a reserve currency. It would be possible to make SDRs a requirement for international commerce forcing all nations to sponsor the currency by depositing assets to get the SDRs required for trade. The Yuan and Amero would then become to two remaining currencies representing a clear distinction between the BRICs and the West, I guess the question then becomes what happens to Australia?

I've read that the US doesn't want the reserve status anymore anyway (how convenient), it limits their ability to manipulate like other nations can - basically its a pain in the ass. While they've never said that and that clearly is the opposite of what's in the Fed's charter their actions certainly have indicated they consider the status and related benefits not worth maintaining. It is clear that the dollar will lose its reserve status sooner than later, I think Putin bailing out of the G8 was an ominous sign for the dollar.

Its a race to the bottom for labor rates and currency valuations, the Euro is beating the Dollar right now and they are probably leading in labor rates as well. Since China can't make everything the world consumes, the Eurozone and the US are in a fight for second place - basically. The Eurozone is fighting between themselves on labor rates but they can't fight on currency - yet anyway.

Whatever it takes to eliminate the Federal Reserve Banking system, at least here in America, I am all for even if it means taking some pain. There is nothing that would make me happier than to abolish the current banking/monetary system, once again we could be the beacon for the rest of the world to follow. Create debt-less money by spending it into existance, back some the transactional supply with Gold/Silver/Platinum while the digital currency could be backed by a slightly wider basket of assets like oil reserves, land, etc. That's obviously my own thinking, but a guys gotta have some fun.

I've been saying it is going to happen this year as well, I originally thought after the election in November but than I realized that at some point they lose control of the final timing. So, I'm not sure anymore if it (the global financial system) will hold up through the summer, it is looking less and less likely. The timing of a collapse, at this point, rests on the shoulders of the Eurozone. While I'm sure the Fed is prepared to do what ever it can, there is only so much the Fed can do and Europe went way, way off the highway! Their banks make ours look responsible!

I'm still finding it hard to believe that the Troika, or more specifically the real powers that be, would allow the zone to collapse or even risk collapse? This doesn't make sense because it flies in the face of 20 years of work (questionable word I know) to put the thing together in bringing the world one step closer to a New World Order. From my point of view, allowing such an insignificant country to put the whole zone at risk is stupid and may ultimately cause the whole thing to unwind. Unless I miss the idea of the NWO then allowing Greece, or any country, to exit the Euro seem very counter productive.

The dollar is like the walking dead, a zombie currency that has had all of the life sucked out of it over the last 99 years by the vampire Federal Reserve Bank. They've very efficiently lost a little over 1% of value per year, nicely done boys!